As a result of this clause, enacted into the Constitution in 1791, Congress may not establish an official state religion, nor give political preference to one religion over another. The original prohibition has been expanded by the Fourteenth Amendment to include not just Congress, but government organizations at the state and local levels. It does not apply in any way to private organizations, such as private schools; however, many states have enacted more restrictive measures, called collectively Blaine amendments, to prohibit State funding of sectarian schools.

The Establishment Clause is also complemented by the Free Exercise Clause which continues "or prohibiting the free exercise thereof." In addition to being restricted from favoring one religion over another, the government may not unduly restrict one religion over another or the practice of religion.

The establishment clause creates the basis for separation of church and state. Its intention and meaning remains a subject of great controversy and political dispute. Under the Establishment Clause, courts have justified rulings against school prayer and public displays of the Ten Commandments.